Wow, sexy stuff! So I guess we are going to see the EIA predicting radical changes to the energy mix in 2040, especially as many of the trends I just highlighted are only getting started. Right? Let’s look at EIA’s flagship chart (page 17 of the report, click for larger image on all charts):

Apologies for my poor blog post productivity: I am in the midst of Open University exams, which are occupying a lot of my time. Further, I have a number of draft long blog posts on the go that I am having difficulty completing; sometimes blog posts write themselves, sometimes they have to be extracted like an impacted wisdom tooth.

In the meantime, here are a few fabulous infographics. I don’t dare stray into the GMO debate at this time as I haven’t researched it enough. I think, however, that these graphics vividly demonstrate that we have been pretty adept at modifying plant organisms irrespective of GMO technology. We could open a philosophical debate here about what are “natural” plants (but I won’t).

All I will say is that these modern plants are very different from their descendants. They have also been developed to meet human needs.

Hat tip to James Kennedy, a chemistry teacher in Australia, who put these graphics together (here).

Apologies for my blogging hiatus: I’ve been otherwise engaged for the last few weeks in academic activities, some economics consulting and (most timing consuming of all) grassroots campaigning in the run-up to the UK general election.

I am not a natural ‘party political animal’, being too eclectic in my ideological views. Indeed, I like bits of each party manifesto but find other parts bonkers. Nonetheless, being back on home turf for an election for the first time in over 15 years, I wanted to get involved.

My own personal ‘wedge’ issues in this election were twofold: climate change (as would be expected from this blog) and anti-austerity. Climate change is still, to me, the central risk of our times. It has the potential to overturn everything within my children’s lifetime, not least of which is democracy itself. Unfortunately, neither climate change nor the environment in general feature in the top 10 concerns of the UK public (click for larger image):

Of the five main political parties that competed in the UK general election–the Conservatives, Labour, Lib-Dem, UKIP and Green–three have an aggressive commitment to act over climate change (Labour, Lib-Dem and Green). Unlike the Republican Party in the US, the Conservatives have in the past also had a forward-looking approach to carbon emission mitigation (as evidenced by their continued support of the UK’s Climate Change Act). The leadership, has, however, grown increasingly lukewarm over leading on the climate-change issue.

With regard to austerity, my stance is more nuanced. In short, why prioritise reducing debt at a time when interest rates on long-term government debt are at rock bottom levels? The following chart is taken from the Bank of England‘s latest “Inflation Report” published on the 13th May, Continue reading →

The one and only public debate between the leaders of seven UK political parties took place tonight ahead of the UK election May 7. Key topics were 1) austerity, the budget deficit and debt, 2) the NHS, 3) immigration and 4) education and intergenerational inequality. These are all big issues but hardly new.

Forgotten in the general election campaign to date are a series of ground-breaking initiatives taken by the coalition government over the past five years. These are examples of genuinely fresh thinking and should be applauded regardless of your politics. In no particular order:

Dubbed the ‘nudge unit’ in a hat tip to the book by Thaler and Sunstein, this team has taken the idea of choice architecture into the heart of government. As a result, we have seen such policies as pension provision where your choice is to opt out rather than opt in–so the lazy amongst us create pension savings by default.

The nudge unit comes about from the explicit recognition the humans are not rationale calculating machines as they are portrayed in post-war economics and that frequently ‘wantability’ is different from decision-making that maximizes our well-being (see my post here).

2. Introduction of Well-Being Metrics

The Office for National Statistics (ONS) introduced its Measuring National Well-being (MNW) programme in 2010. We now have four questions included in the well-being survey that broadly relate to the three main ideas of happiness–life satisfaction, leading a meaningful life and feelings. As this data set builds, it will give policy-makers a far better idea as to whether what they do makes people happier (click for larger image on the chart below).

Sometimes it is best just to pilfer other people’s work– any other action feels rather pointless. This from Andy Skuce’s blog Critical Angle (click for larger image):

Bang! Marty McFly goes back to 1955 to persuade Doc to save the world from fossil fuel emissions (one can but dream).

Then again can we ask ourselves whether the relatively low energy intensity economies of the 1950s had a higher level of well-being than those that exist now (of course development has widened and population has grown). I’ll let my readers have a think about that.

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I’ve been mulling a name change for the blog for some time. The name the “The Rational Pessimist” was a riposte to Matt Ridley’s book “The Rational Optimist“. Ridley’s book is a paean to global free markets and human innovation–and in parts is correct. Since the industrial revolution commenced, technology coupled with capitalism has lifted the bulk of the world’s population out of a Hobbesian life that was “nasty, brutish and short”. But where I differ from Ridley is in believing that a 200-year data set of economic growth can fully capture all future risk.

Ridley’s book is Panglossian. He believes that every problem we face–from climate change to resource depletion–is relatively minor, just waiting to be solved by a technological fix. For him, price always trumps scarcity. Whenever something looks like it is running out, the magic of markets will always lead to new discoveries or acceptable substitutes.

As an economist by training, I accept that the everlasting dance between supply, demand and price is something of beauty. But I also believe that it has its limitations. A backward-looking empirical observation that things haven’t run out is different from a forward-looking theoretical prediction that things won’t ever run out. North Sea oil is running out regardless of price, and a global supply of oil is not qualitatively different from a local one.

Of course, technology may provide a perfect, or dare I say it better, substitute for fossil fuels. But then again it may not. That is uncertainty, and the consequences of that uncertainty is the concept of risk.